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Copyright Infringement in Theatre and Damage Limitation from Large Claim

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IP Disputes

Copyright Infringement in Theatre and Damage Limitation from Twentieth Century Fox Claim

Twentieth Century Fox v. Cyclone Events Limited and Stiwt Arts Trust Limited

Twentieth Century Fox v. Cyclone Events Limited and Stiwt Arts Trust Limited.

 

Original creative works, upon creation, are protected by copyright. The world of entertainment is filled with such works, including, film, music, television and more. Oftentimes, when works become popular they inspire the public to emulate them. In certain instances, this can result in copyright infringement claims being brought by media giants against undersized infringers.

Virtuoso Legal acted for Cyclone Events Limited (“Cyclone”), which was a family-run events company, and the Stiwt Arts Trust (“Stiwt”), which runs a 490-seater Stiwt community arts theatre in Rhosllannerchrugog, in the north Wales.

Cyclone, Stiwt and their respective directors were faced with High Court proceedings, brought by entertainment giants, Twentieth Century Fox Film Corporation, and their music publishing arms, TCF Music Publishing Inc and Fox Film Music Corporation (‘Fox’) after Cyclone performed its own version of Fox’s “The Greatest Showman” at the Stiwt theatre in summer 2018.

Cyclone and Stwit admitted their naive wrongdoing early in the proceedings, so the case concerned two main issues (1) whether the case should be trialled in the High Court or the Intellectual Property Enterprise Court (“IPEC”) and (2) the level of damages. Virtuoso Legal acted on behalf of the defendants in order to mitigate the likelihood of a financially ruinous result for the individuals and community theatre involved.

 

High Court or IPEC

The total ticket sales for the production amounted to around £40,000. Despite this, Fox proceeded to issue a High Court claim citing that the claim was worth “in excess of £200,000”. Indeed, at a number of points, Fox claimed damages would be in excess of £500,000.

The Virtuoso Legal’s team successfully brought about an application to transfer the proceedings to the SME friendly IPEC, where the defendants could benefit from its capped costs regime. By this point, Fox had incurred over £90,000 in legal fees. Fox sought to appeal the decision to transfer, but that appeal was refused by Mr Justice Birss, who stated that the “appeal [was] wholly without merit”.

This case illustrates that would be Claimants should be extremely careful when issuing a claim. For those who do issue in the wrong court, the sooner transfer is agreed, the lower your cost exposure.

 

Settlement

Fox served its “Points of Claim” (which set out how much damages they are claiming) which added up to a maximum of £72,821.91 plus interest. This was quite the climb down by Fox, who had previously been claiming over £500,000 in damages. However, it did mean that the parties were able to engage in sensible settlement discussions.

Once Fox had started to become more realistic about the value of its damages claim, the parties were able to settle the proceedings in July 2019. In particular, the Defendants agreed to pay Fox the sum of £15,000 in damages, in other words less than 3% of the amounts Fox were (at one point) claiming against the Defendants. If only Fox had correctly valued their own claim and engaged with negotiations from the outset, the costs of these proceedings could have been avoided.

Despite incurring significant costs themselves, the Defendants also agreed to pay £10,000 towards the Claimants’ costs in order to bring this matter to a conclusion. Given Fox’s estimated legal costs on this matter were in excess of £100,000, this is a “drop in the ocean” of the costs incurred by Fox by their own conduct.

Elizabeth Ward, principal of Virtuoso Legal said:
“These proceedings have been deeply regretful to witness over the last year. The Defendants clearly made an early set of mistakes in the showing of their version of the Greatest Showman. However, in my view, they were simply naïve in their desire to put on a local theatre production for predominantly children, rather than some sort of criminal mastermind infringement operation. Unfortunately, Twentieth Century Fox did not see the case this way and embarked on a wholly disproportionate set of proceedings. If Fox had been more reasonable at the outset, these proceedings could have settled within a month, rather than dragging on for almost a year, and in the process risk the closure of a local community theatre and costing Fox well over £100,000. We would hope they (and other similar rights holders) would re-consider this sort of disproportionate approach in the future. If other local theatres find themselves being bullied by large corporations, I trust they will pick up the telephone and give our team a call.”

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